Operating income for the business unit came in at $604 million – more than half of the operating income for all of Amazon this quarter – as a result of $1.85 billion in operating expenses. Analysts had estimated a profit of 58 cents a share on about $28 billion in revenue. More and more, it looks like AWS is going to be a huge second line of business for the company, especially if it continues to grow at this rate.
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The world’s largest online retailer on Thursday reported unexpectedly strong sales and earnings in the first quarter, blowing out analysts’ projections and driving shares up more 12 percent after hours. This was Amazon’s fourth-straight profitable quarter.
Today, Amazon.com, Inc. (NASDAQ:AMZN) is due to report its first quarter earnings of fiscal 2016 (1QFY16) after the market closes. And revenue for Amazon Web Services (AWS) came to $2.57 billion, edging out estimates of $2.53 billion. Product sales climbed from $17.1 billion last year to $20.6 billion this year, while service sales increased from $5.6 billion to $8.5 billion.
Net sales increased 28% to $29.1 billion in the first quarter, compared with $22.7 billion in first quarter 2015. As Amazon continues to add services for its Prime members, including streaming video, streaming music and same-day delivery, customers are becoming increasingly loyal and willing to buy more from Amazon. The Amazon founder described a “window of opportunity” as large companies stake out online territories. Operating income in the division was $716 million, almost three times the year-earlier total. Amazon is already the leader in retail business, but that segment is reaching its maturity and is a low-margin business.
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Before Amazon provided its outlook for the current quarter, Wall Street analysts had expected that Amazon would post $28.3 billion in sales between April and June.
